What do I do if I can't afford home any longer and I received court papers to go for foreclosure?

There is insufficient information here to answer that question and what you seem to be seeking in asking it I think constitutes legal advice, something we are forbidden to offer over the internet. Most attorneys will offer a free consult. Go see at least one. Provide them information about your situation. A bankruptcy attorney might be able to help you save the home, but this depends on details such as why you are not able to afford the home: budget issues, income issues, other debts, loan modification issues or a combination of these. I am concerned that you state you were provided with court papers since most foreclosures in California are done non-judicially, maybe you mistook the documents as court papers. In either case, unfortunately what you say brings to mind more questions for you rather than an answer so take the time to see someone in an interactive way where you and the attorney gets to ask and answer some questions to come up with a plan for you to deal with this development.

I am assuming you have contacted a real estate broker and tried to do a "short sale". If not, call a real estate broker and tell them you can no longer afford the payments, and you want to do a short sale. After the short sale, most mortgage companies will not bother you even though they received less than what was owed. If they do contact you for payment on the deficiency, you can look at the option of doing a bankruptcy then.

The first step would be to reach out to your mortgage company to see if they would be willing to modify the loan. By restructuring the terms of the loan, the bank may lower your monthly payment into an amount more manageable. If this is unsuccessful, a number of individuals have saved their homes through filing a Chapter 13 bankruptcy. A Chapter 13 Bankruptcy allows you to catch up on your past due payments through a payment plan. In addition, mortgage companies may be more willing to negotiate a plan modification while you are in a Chapter 13. If you have a second mortgage on your properly, you may be able to strip the entire lien in a Chapter 13 bankruptcy. Finally, it may make the most sense just to walk away from your home. If you are concerned about a large deficiency balance, it may be worth considering filing a Chapter 7 bankruptcy, which will discharge that debt.

How you respond will depend on how long you want to stay in the house. A foreclosure may be worse for your credit record than a bankruptcy. If you want to avoid both, offer to surrender the house and be prepared to move out as soon as you are required. If you want to stay in the house as long as possible, file a bankruptcy just a few days before the court orders the foreclosure, making sure that you get prompt notice of your bankruptcy to the creditor's attorney. That will stop the foreclosure from proceeding for a minimum of 30 days and probably longer.

You could try a loan modification to reduce your payments or you could attempt to sell your home to find something more affordable. Since a foreclosure will seriously harm your credit, either of these choices would be better than a foreclosure, which will haunt you for many years.

You should consult with an experienced bankruptcy attorney promptly. In either a Chapter 7 or Chapter 13, you can surrender the property and possibly delay the foreclosure. Somewhat without a concern about potential taxes. Also, you will not run the risk of being assessed a deficiency balance if the property sells for less than you owe.

Bankruptcy can delay foreclosure; sometimes for quite a while, but it cannot stop a foreclosure forever if you don't make the payments. A chapter 13 though, can remove a wholly unsecured second loan, which can make staying in the home more of a possibility.

In general: If in Idaho, you can live in the home up to 10 days after the foreclosure sale occurs. If you don't leave, the new owner can have you removed and ask the court for you to pay its attorney fees and costs. Also, you could still have some liability with regard to homeowner association dues and other matters depending on when the lender that forecloses changes title to the property.